ServiceNow Q2 Earnings Beat Estimates, AI Drives Guidance

ServiceNow reported stronger-than-expected financial results for its second quarter, driven by surging demand for its artificial intelligence products, but its stock experienced significant volatility following the announcement. The enterprise software company released its earnings for the quarter ended June 30, 2026, on July 22.

The company posted adjusted earnings per share of $0.90, exceeding analyst forecasts of $0.86. Revenue reached $3.99 billion, also surpassing expectations of $3.93 billion. Subscription revenue, which constitutes the majority of total sales, grew to $3.88 billion, a 24.5% increase from the same period last year. A key metric for future revenue, current remaining performance obligations, rose 21% year-over-year to $13.2 billion.

The most significant highlight was the performance of ServiceNow's AI business, which surpassed $1 billion in annual contract value during the quarter, achieving that milestone ahead of the company's internal schedule. CEO Bill McDermott stated that agentic deployments of ServiceNow AI increased ninefold over the past nine months. The company also reported closing 123 deals worth over $1 million in net new annual contract value,...